Who Would Want Gold When They Could Have Paper?

“NEVER MIND” — PART II

Marc Harris: “I’ve read the summation of one of those key critiques of Reinhart-Rogoff, and it’s true that one of the big problems appears to be a spreadsheet-range error. (Whoops! Turns out debt doesn’t ruin economies.) But there appear to be plenty of data issues too. Choosing the starting points and handling spans of successive years appear to be the most serious. I’m not the only one who thinks Reinhart and Rogoff owe it to the rest of us to be candid about their data selection and analysis, especially considering how influential it’s been in pushing politicians toward ‘austerity,’ also known as ‘contractionary’ policy. There should be no surprise that contractionary policy is . . . contractionary.”

GOLD

Some have asked what to make of the recent sudden drop in the price of GLD — more than 10% — and of course the answer is: I don’t know. Maybe it’s that . . . [Sarcasm ON] “Why would anyone want to own gold when they can own paper money?” [Sarcasm OFF] I’d love to think we’ve seen the top in gold, but for me it remains a sensible hedge.

VENEZUELA UPDATE

My friend writes . . . “Things have calmed down just a bit — both sides have backed off — we were worried that Capriles and Leopoldo Lopez would be in jail by the end of yesterday, which would have generated a huge commotion and probable bloodshed. It is unlikely that Capriles will be able to turn this around, despite the clarity of fraud; but on the other hand, he has already turned it around. Chavismo will never be the same, and we can anticipate its steady ungracious decline into the future, possibly (hopefully) dramatically so. No complaints whatsoever about Capriles, he has done a magnificent job (indeed, bordering on greatness), but many of us have thought that Leopoldo Lopez (who incidentally has a degree from Harvard’s Kennedy School) was the most qualified person to become the next President. Unfortunately, the government thought so too, and so took steps several years ago to ‘administratively’ disqualify him from holding public office for reasons of ‘corruption,’ something they invent all the time now, but he was the first and most prominent victim of false charges. (This was appealed to and 100% discredited in the OAS Interamerican Court of Human Rights, but the government pays no mind.) They will undoubtedly try to do this to Capriles too, except that he has too much political capital to mess with right now. . . . BTW, both Capriles and Lopez are real heart-throbs-gorgeous human beings! This doesn’t hurt, here in Venezuela, where the women win a disproportionate number of international beauty contests, and physical appearance is highly valued.”